Apple boosts retail store performance despite Browett’s missteps

Apple Stores brought in $6,050 per square foot this year.

Apple's retail efforts continue to hit pay dirt, according to the latest analysis from RetailSails. Apple still tops the firm's annual ranking of retail sales productivity, raking in a mind-boggling $6,050 per square foot of retail space—slightly more than twice what its next nearest competitor, Tiffany's, pulls in. That's good news for a division at Apple that had its reputation somewhat tarnished by the hiring of former Dixons Retail CEO John Browett earlier this year.

The $6,050 figure isn't shabby considering upscale luxury brands like Lululemon, Coach, and Michael Kors "only" manage less than $2,000 per square foot, and the average mall store pulls in less than $400 per square foot. And though Apple's retail success is nothing new, it still managed to grow this measure of productivity 7.5 percent over last year's market-leading $5,626 per square foot average.

The growth is important in a year when Apple turned its retail operations over to John Browett, who previously headed UK chains like Dixons, PCWorld, and Currys while their reputation among UK consumers plummeted. Apple CEO Tim Cook's choice to replace former retail boss Ron Johnson—who is credited with creating Apple's retail strategy in the first place—left many UK consumers scratching their heads.

"If you want a dingy shop full of distracting always-on demonstration units, staffed by surly ignoramuses who only want to sell you an extended warranty, then Dixons was the place to go," Phillip Storry, a systems administrator from London, told Ars earlier this year. "Which probably explains why Dixons has been having real troubles of late—consumers are now wise to them and shop elsewhere."

(A UK reader later told me that the PCWorld chain had improved significantly since Browett left.)

Browett led an initiative to overhaul how Apple Stores were staffed, cutting hours in an effort to improve the retail division's operating margins. Amid complaints from Apple Store staff that customer service, store cleanliness, and overall Apple "experience" was suffering, Apple admitted the changes were a mistake and reversed them. Two months later, Cook gave Browett a pink slip, taking over retail operations until a suitable replacement can be found.

36 Reader Comments

I know people who dislike Apple who still think the stores are brilliant.

"Here's our stuff. Come play with it." It's fracking awesome. I wish more stores were like that. The staff is busy enough not to hover or pester you if you don't want to be pestered.

Went to one of the phone carrier's stores (Verizon I think? Can't even recall, which tells you something) with a friend so he could get a charger or something, and it was so sad. 80% of the displays were unpowered. The tablets were on some file browser screen or just locked up. WTF, man? The big display was some plastic crap headphones by some rap singer that looked like they'd snap in two if you looked at them to hard.

There has to be more to the Browett story. Everyone and his grandmother knew the guy was a mistake when first announced. What was the plan there?

OK. Here's one for you.What if...just what if... it turns out that the improved performance was a direct result of all those changes that everybody hated so much? I'm not saying I think that's likely, but it's a really intriguing (disturbing) possibility - just like the companies that have figured out that in their case retaining customers actually costs more than it's worth.

Went to one of the phone carrier's stores (Verizon I think? Can't even recall, which tells you something) with a friend so he could get a charger or something, and it was so sad. 80% of the displays were unpowered. The tablets were on some file browser screen or just locked up. WTF, man? The big display was some plastic crap headphones by some rap singer that looked like they'd snap in two if you looked at them to hard.

This, a million times. Go to any carrier store, Best Buy, BJs, etc., and half the tablets/phones will not work/turn on. Hello, are you even trying to sell these gadgets to me?

A lot has to be said about just having insanely great products the people want. Ron Johnson's move the JCP hasn't improved their bottom line, although they keep trying to mix things up. JCP's problem is that they don't have anything exclusively their own that you cannot get anywhere else.

Conversely, John Browett just didn't seem to have the Apple DNA. It was a surprising hire and an unsurprising fire. People love going to the Apple Store as long as they don't change their hiring practices and start bringing in ex-Best Buy employees to try to sell you a service plan.

My goal in life is to travel to as many Apple stores as I can, take a picture of myself using one of the cameras, and email them to myself for my personal photo library. Still have over 300 places to visit.

OK. Here's one for you.What if...just what if... it turns out that the improved performance was a direct result of all those changes that everybody hated so much? I'm not saying I think that's likely, but it's a really intriguing (disturbing) possibility - just like the companies that have figured out that in their case retaining customers actually costs more than it's worth.

he didn't last long enough and some (all?) of his decisions were even revoked within his own time at apple.

The Apple Store is a fantastic retail apparatus, world class and completely deserving of its accolades, but I've never felt as though it was for "us," the more tech savvy ilk, which is a tragic oversight in untapped retail marketing. I've only ever ended up going into one whenever I needed to pick up my dad and escort him there to buy something, or show him physically what bits of tech I was discussing with him when articles didn't suffice. I suppose that for the boomer generation, with their upbringing in more conventional retail experiences, it's a godsend and complete paradigm changer, but to professionals who happen to work on Apple machines it's just a retail website brought to physical form.

Now, if they had some AIGA cooperative events of substance or some great partnerships with Wacom for more in depth demos of bleeding edge tech...

The one near me is packed at all times. Unfortunately, it's packed to the point that it's hard to actually shop there. I had paid for something online to be picked up in the store, received the email that they were "ready" for me, and when I got there, I was put into a queue to be helped. It was 40 minutes before someone finally helped me, and even he then had to get into a queue to have yet a different person bring the item out of the back of the store. All that for something I had already paid for and just needed to have someone hand to me.

They're extremely busy, which is good for them, but it's like Black Friday every day in there.

OK. Here's one for you.What if...just what if... it turns out that the improved performance was a direct result of all those changes that everybody hated so much?

His changes were designed to cut costs, not increase revenue. The figures calculated here are for revenues generated per square foot per year, and do not consider operating costs (which are typically not publicly available).

OK. Here's one for you.What if...just what if... it turns out that the improved performance was a direct result of all those changes that everybody hated so much? I'm not saying I think that's likely, but it's a really intriguing (disturbing) possibility - just like the companies that have figured out that in their case retaining customers actually costs more than it's worth.

If it were operating margins then yes, that would be a real possibility. But the figures quoted here are raw sales per square foot. It's hard to draw a line between cutting staff and increasing sales.

The one near me is packed at all times. Unfortunately, it's packed to the point that it's hard to actually shop there. I had paid for something online to be picked up in the store, received the email that they were "ready" for me, and when I got there, I was put into a queue to be helped. It was 40 minutes before someone finally helped me, and even he then had to get into a queue to have yet a different person bring the item out of the back of the store. All that for something I had already paid for and just needed to have someone hand to me.

They're extremely busy, which is good for them, but it's like Black Friday every day in there.

This is a problem at all of the Chicago-area locations I've been to in the area (LPK, NMA, Oakbrook, Schamburg, Old Orchard), and one I have complained about loudly to managers at every store. Though my girlfriend seems to love her Apple products (iPhone, iPad, Apple TV), she hates stepping foot into the stores because they are usually over-crowded and it takes forever to, just like you said, simply pick up a product that has already been paid for or reserved online.

Apple's success has been, in some cases, a double-edged sword: the stores are packed and generating significant revenue, but the customer experience suffers when it takes more than 10 minutes to just grab what you already paid for and walk out.

what if... it turns out that the improved performance was a direct result of all those changes that everybody hated so much?

When he shitcanned people and reduced staffing weeks before a big release, if you remember, Cook intervened immediately and Apple assured investors the changes would still be reversed so as to not impact sales.

The stores are way too loud inside.... My 80 y/o hearing-aid wearing mother commented on this after ing taking her iPhone 4S to the Novi store for warranty replacement yesterday. I noticed the same thing at the apple stores here in Zurich.

Btw, the ringer/speakerphone failed on her 8 mo old phone, and even though she took her MBA withe phone backups on it with her, after the restore from backup to the new phone, the only apps in her home screen folders are the default system apps; config features like her lock screen code entry was disabled, phone didn't find her time capsule, etc. is such a disappointing result normal, or does apple start having to hire a better quality of retail geniuses?

Her comment, after spending all that money, I thought these things were supposed to just work without such nonsense...

The stores are way too loud inside.... My 80 y/o hearing-aid wearing mother commented on this after ing taking her iPhone 4S to the Novi store for warranty replacement yesterday. I noticed the same thing at the apple stores here in Zurich.

Btw, the ringer/speakerphone failed on her 8 mo old phone, and even though she took her MBA withe phone backups on it with her, after the restore from backup to the new phone, the only apps in her home screen folders are the default system apps; config features like her lock screen code entry was disabled, phone didn't find her time capsule, etc. is such a disappointing result normal, or does apple start having to hire a better quality of retail geniuses?

Her comment, after spending all that money, I thought these things were supposed to just work without such nonsense...

The restore wasn't done properly. I've backed up and restored several iPhones recently and the restored phone is 99% like the original. The only things missing are various passwords need re-entry, and Bluetooth pairing needs to be redone.

Apple's success has been, in some cases, a double-edged sword: the stores are packed and generating significant revenue, but the customer experience suffers when it takes more than 10 minutes to just grab what you already paid for and walk out.

We should all have to deal with such swords. ;-)

I just go play with the 27" iMacs while I wait, or look for devices where someone left their Facebook or other account logged in.

Any popular location has this issue. Try to figure out your favorite store's off hours? The one near me right after work (if I get off early) isn't so bad. Just ask one of the blue shirts when it's least crowded. There has to be a local minima.

As for the noise factor. Dunno... carpet probably wouldn't work with the theme. Adaptive noise cancelling? Don't they have a system like that intended for restaurants?

I just go play with the 27" iMacs while I wait, or look for devices where someone left their Facebook or other account logged in.

A friend who shall remain nameless came up with a great prank once. With a bit of advance planning he loaded a script onto as many desktop machines as possible that did the following:

1) Downloaded a Jpeg of Goatse (yes, that one) and set it as the desktop photo. (The image and the script itself was stored at Megaupload using an anonymous account, iIrc.)

2) Set a timer to trigger Expose to clear all windows and reveal the desktop at a pre-designated time.

3) Erase the script itself once triggered.

Having accomplished that, we all went for a drink and then returned at the designated time and watched from the background. When the desktops all revealed, there were gasps, minor screams of horror, laughs, and surprised people putting their hands over the screen trying to block the image. It was the best three minutes I'd ever spent inside an Apple store.

While of course the consumer experience has a lot to do with it, there is one thing which I'm always surprised people don't realize is a huge contributing factor to this: these stores are usually pretty tiny! They are able to fit everything they want to sell into a relatively small area, where somewhere like Best Buy has to spread their crap over a space 10x as large (not to mention with many lower priced items in that extra space). So when the costs of the products are similar (ie, each customer walks out having spent a similar amount of money), their cost per square foot is going to be much much smaller.

PS I know this is only one factor, and probably not even the most contributing factor, so please save the "no, it's because of this" replies.

The Apple Store is a fantastic retail apparatus, world class and completely deserving of its accolades, but I've never felt as though it was for "us," the more tech savvy ilk, which is a tragic oversight in untapped retail marketing. I've only ever ended up going into one whenever I needed to pick up my dad and escort him there to buy something, or show him physically what bits of tech I was discussing with him when articles didn't suffice. I suppose that for the boomer generation, with their upbringing in more conventional retail experiences, it's a godsend and complete paradigm changer, but to professionals who happen to work on Apple machines it's just a retail website brought to physical form.

Now, if they had some AIGA cooperative events of substance or some great partnerships with Wacom for more in depth demos of bleeding edge tech...

More techy people tend to just buy on line and go for the absolute best price so a retailer like this would just go out of business because all that storefront and demo stock costs money that the target market won't pay for.

Specialist photographic stores have almost entirely vanished for exactly this reason. The customers complain that they want better service but are completely unwilling to accept that they're going to have to pay a higher price for it.

My goal in life is to travel to as many Apple stores as I can, take a picture of myself using one of the cameras, and email them to myself for my personal photo library. Still have over 300 places to visit.

More power to you, but I hope you pose with something distinct to the locale, otherwise you could save yourself a lot of time & money by snapping the same pic 300 times at the next store...

OK. Here's one for you.What if...just what if... it turns out that the improved performance was a direct result of all those changes that everybody hated so much? I'm not saying I think that's likely, but it's a really intriguing (disturbing) possibility - just like the companies that have figured out that in their case retaining customers actually costs more than it's worth.

If you assume that's the case, then it leads to another question: is that gain sustainable? I could see it if this sort of Dixons-izing of Apple stores created a bump in profitability, but it's very possible that it did so only by cannibalizing the halo around Apple's brand and the goodwill of their customers. Over time, as the store became more blatantly mercenary, those numbers might have tanked.

The Apple Store is a fantastic retail apparatus, world class and completely deserving of its accolades, but I've never felt as though it was for "us," the more tech savvy ilk, which is a tragic oversight in untapped retail marketing.

I believe this is by design. Apple always championed simplifying (or maybe even *dumbing down*?) technology to make them accessible and enjoyable to use for non-techie crowd, for a premium. It's sad that they try to remain in the premium world, and not try to reach out to larger crowd without extra cash.

Went to one of the phone carrier's stores (Verizon I think? Can't even recall, which tells you something) with a friend so he could get a charger or something, and it was so sad. 80% of the displays were unpowered. The tablets were on some file browser screen or just locked up. WTF, man? The big display was some plastic crap headphones by some rap singer that looked like they'd snap in two if you looked at them to hard.

This, a million times. Go to any carrier store, Best Buy, BJs, etc., and half the tablets/phones will not work/turn on. Hello, are you even trying to sell these gadgets to me?

Its insane. The only place near me that actually has a few phones/tablets (not all just some) that you can play with is one of three T-Mobile stores. It just seems like a no-brainer

The Apple Store is a fantastic retail apparatus, world class and completely deserving of its accolades, but I've never felt as though it was for "us," the more tech savvy ilk, which is a tragic oversight in untapped retail marketing.

I've been mucking about with computers since the Apple II. I'm as savvy as anyone, I guess. Still love the Apple stores and my Apple products. There's times I want an appliance that works without giving me guff. Can't get at the file system or run a Python interpreter? Uncountable f***s not given by me. Other times I want to tinker, so I build a new gaming rig or put together a small, cheap PC as a home automation controller. This idea that I need some fussy, guru demanding device for everyday tasks eludes me. Just stream the damned Netflix to the damn TV.

Went to one of the phone carrier's stores (Verizon I think? Can't even recall, which tells you something) with a friend so he could get a charger or something, and it was so sad. 80% of the displays were unpowered. The tablets were on some file browser screen or just locked up. WTF, man? The big display was some plastic crap headphones by some rap singer that looked like they'd snap in two if you looked at them to hard.

This, a million times. Go to any carrier store, Best Buy, BJs, etc., and half the tablets/phones will not work/turn on. Hello, are you even trying to sell these gadgets to me?

Yes! What is with that? I was looking at laptops at Staples once and they had security devices tying them down that actually crisscrossed over the keyboards, so even if the machines were on (which half of them weren't) and unlocked (which the other half weren't) you couldn't type anything anyway.

The other thing was they had the laptops on two shelves – one at shoulder height (too high) and the other at knee height (too low). So to even look at the machines, you either had to strain your neck upward or crouch downward.

It's amazing how when Apple does things like place their products at a comfortable height and power them on and keep them unlocked so you can actually use them, they actually sell them and make money! Who would've thought?!

I was looking at laptops at Staples once and they had security devices tying them down that actually crisscrossed over the keyboards, so even if the machines were on (which half of them weren't) and unlocked (which the other half weren't) you couldn't type anything anyway.

To be fair to Staples (and other big box stores), they sell everything from 99-cent scratch pads to $1000+ laptops. Unfortunately, most of the sales tends towards the lower-margin stuff. That is, after all, their business model.

So given their margins, they can't afford to have the high number of staff on hand that Apple can, and thus have to lock everything down tighter.

(It might be argued that they could create stores-within-a-store, complete with separate secure entryways, where the high-margin stuff can be looked over by a higher density of staff but I would personally bet against success. As has been pointed out numerous times, big box stores often serve as showrooms for items that people then go ahead and buy online to avoid tax. It's a tough business.)

I was looking at laptops at Staples once and they had security devices tying them down that actually crisscrossed over the keyboards, so even if the machines were on (which half of them weren't) and unlocked (which the other half weren't) you couldn't type anything anyway.

To be fair to Staples (and other big box stores), they sell everything from 99-cent scratch pads to $1000+ laptops. Unfortunately, most of the sales tends towards the lower-margin stuff. That is, after all, their business model.

So given their margins, they can't afford to have the high number of staff on hand that Apple can, and thus have to lock everything down tighter.

I don't see what staffing really has to do with it...the machines at Apple stores are secured to the desks too, even though there's plenty of staff. They just secure them in a way that doesn't actually prevent you from using them!

And even if Staples legitimately does need to lock down their devices in that way, for whatever reason, that still doesn't excuse the fact that most of them are either powered off or logged out.

And even if Staples legitimately does need to lock down their devices in that way, for whatever reason, that still doesn't excuse the fact that most of them are either powered off or logged out.

That much I can agree with. However, they also don't necessarily have the technical expertise or resources to ensure that the machines are set up and maintained correctly (although the vendors themselves could help by installing bulletproof guest accounts that reset when hosed). Without supervision, a store-demo computer can become a playground for all sorts of amateur hackers. Hell, look what my friend pulled off inside a well-staffed Apple store.

I agree with your sentiment, but in reality the low-margin stores are at a disadvantage when it comes to carrying complex products. They're really set up for high-volume selling, not demoing. That's how they keep their prices low.

A few points; you can keep your Ferraris, it's 'how much money does an Aston Martin dealership make per square foot' that's the important question. Also - everything everyone says about Dixons is true and I even had a Saturday job there in the pre-Cambrian - it's only got worse since then. Apple is a good retail experience - even in the insanely crowded Kingston on Thames store which is just constantly rammed - you can see the fear in the specialists eyes as they greet the hoards around the iPad mini table (jeez, talk about feeding frenzy) but they smile and do it anyway. But - as an alleged media pro I would like to see more pro stuff in the stores - not sure if that's the best use of square footage but it would be good to see.